Edelman Asia: Agency Business Report 2015

China's brands growing up and expanding beyond the country's borders is a major business driver across the APAC region, according to Edelman president and CEO David Brain. "That will be big trend for agencies to get on," he says.

David Brain
David Brain

Asia Head: David Brain, President and CEO
Ownership: Independent
Asia Offices: 21 wholly owned; Partner: 5
Asia Revenue: US$117 million
Asia Headcount: 1,287

China’s brands growing up and expanding beyond the country’s borders is a major business driver across the APAC region, according to Edelman president and CEO David Brain. "That will be big trend for agencies to get on," he says. "You just have to see the capital flows of where they are investing now."

He also highlights a continual effort to inject digital and social media deeper into the enterprise, for his agency and client companies, as both a structural and revenue driver.

He gives HP as an example, saying the story there is "not just about engagement and customer awareness, but how do you use social and digital to drive revenue and drive business ¬[through] a huge, hard-nosed change and trend".

For Edelman itself, Brain says adopting a more digital approach to business has been the biggest lift in the last 18 months.

"Not just for us in Asia," he says "but the whole company. It fundamentally changes the way that everyone in the company operates with each other." This is a theme that comes up repeatedly throughout the industry no matter what region you focus on.

Digital technology brings enormous challenges to every kind of business, from music to banking. But for PR it also opens considerable opportunity as the line between what is PR or marketing blurs and more companies see the advantages of PR-led campaigns over advertising-led ones. Owned and earned media seem to have gained more ROI and reach as digital channels have become a bigger part of the communications mix.

But Brain echoes a sentiment that many PR leaders have remarked to PRWeek over the past few years. Technology itself isn’t the issue. Talent is.

"Recruitment is still the bottleneck," Brain explains. But he sees a solution in spreading the work around an agency network. When things are digital they are also more portable; there is an advantage to scale. "The new aspect for us is the development of regional hubs. If [we] don't want to have a user interface team in every market, we’ve got a brilliant user interface team in Beijing; a beautiful, immersive design team in Sydney. Getting the offices and digital teams to split the work through time zones. It does mean that you can employ much higher grade than the client needs without having to buy that [in terms of new staff]."

And on the same theme of talent, Brain points to a new hire for the firm in Asia as a significant development for the year. "I think probably the biggest single [highlight] was getting Carol Potter to join us from BBDO. Carol was the CEO for Greater China for BBDO, lived in Shanghai for seven years. We’re making quite a deliberate switch for more CEO attention and budget, while we’ve, for a number of years, been investing in developing skills and assets in digital. Now we’re getting much more of the creative content side of that. The next stage of peeling that onion is getting very senior people in the organization who can talk marketing not just brand—and there are very few of those in the PR industry. So [we got] Carol to come in and help us with that next aspect; [she] can talk about business and market and make sure our offer is tailored to that.

"PR companies used to have lots of ex-journalists and the traditional PR structure was the pyramid with the account director at top. Everybody did a little bit of everything else—we were fundamentally generalists. Now you’re having a much more multiple specialist offer—a designer, a media planner, etc."

Markets where Brain sees all of these factors coming together at once are also the ones where there seems to be good growth for the agency. But, he insists, "everywhere has grown", citing Kuala Lumpur as an example of a "small market growing quickly". "We just got it right," he says. "It’s not necessarily to do it with clients or macro economics. If you’re got a good leader with a good offer in the market at the right time and the team are all working well together, clients sniff and smell that out." Government business, IPOs and capital-raising are examples of the type of business driving the market, he adds.

On a broader scale he says Japan shows a pattern of good macro-economic-based growth as "a lot of Japanese companies, on the back of a broad yen, have been investing globally again. We were helping Japanese brands to globalize."

For 2015, Brain expects digital forces and China to shape much of the business in Asia but he still sees real fundamentals in core reputation work.

"Corporate reputation work, issues work, sustainability, profit and purpose-type work," he says. "Japan is the best we’ve got at financial and capital market, the Australian offices are the best at marketing and the social digital work. Singapore is the best at regional international work. Malaysia is the best at crisis and issues."

In terms of business growth in 2015, he is more cautious: "We were clipping along at between 20 and 25 per cent for the last three years. [That has] dropped to 14 or 15 per cent this year. I can see more growth if I can get more of the right talent in. I would like to get it nearer to the 20 [per cent mark]."x

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